U.S. stocks ended lower on Wednesday as Treasury yields rose above the psychologically important level of 3% and oil prices jumped, fanning worries about inflation and the outlook for interest rates.

The technology sector fell, with shares of Intel Corp dropping after Citi Research said the chipmaker could pre-announce weaker-than-expected earnings for the second quarter. Other chip shares also declined.

Brent crude oil prices rose above $123 a barrel and hit a 13-week high, while the Dow Jones transportation average significantly underperformed the other main indexes on the day.

"The 10-year Treasury yield is up over 3%. That's probably part of why we're seeing the drawdown in the market today," said Robert Pavlik, senior portfolio manager at Dakota Wealth in Fairfield, Connecticut.

"That level is what people are focused on because it represents an increase in interest rates and a reflection of inflation and market volatility."

U.S. benchmark 10-year Treasury yields rose after the U.S. Treasury Department saw tepid demand for a sale of 10-year notes.

According to preliminary data, the S&P 500 lost 45.18 points, or 1.09%, to end at 4,115.50 points, while the Nasdaq Composite lost 90.15 points, or 0.74%, to 12,085.09. The Dow Jones Industrial Average fell 273.57 points, or 0.82%, to 32,906.57.

Investors are also cautious ahead of U.S. consumer price data on Friday morning. The report is expected to show that inflation remained elevated in May, though core consumer prices - which exclude the volatile food and energy sectors - likely ticked down on an annual basis.

"People looking for the peak inflation narrative keep getting hit in the face every day as energy goes up," said Thomas Hayes, managing member at Great Hill Capital LLC in New York.

The U.S. Federal Reserve is expected to raise rates by 50 basis points at each of its June and July meetings, with a similar move also likely in September, in an effort to combat inflation.